Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements

At a glance

Income tax provision preparation for stand-alone subsidiary or carve-out financial statements is a challenging and complex area of practice. In completing these calculations, we believe it is important to have a consistent, thoughtful framework for addressing the many judgments involved in the process. To assist you with the preparation of separate company financial statements, PwC's Tax accounting insights presents "Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements" publication.

Income tax provision preparation for stand-alone subsidiary or carve-out financial statements is a challenging and complex area of practice. In completing these calculations, we believe it is important to have a consistent, thoughtful framework for addressing the many judgments involved in the process. As companies focus on acquisitions, divestitures and the implementation of strategic growth plans, such as initial public offerings, getting these separate company financial statements right becomes increasingly important.

To assist you with the preparation of separate company financial statements, PwC's Tax accounting insights presents "Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements" publication (originally released in the February 2009 issue of The Tax Executive). In this new release, we made updates to reflect FASB codification, provide clarification around the benefits-for-loss approach, and further emphasize the importance of understanding pre-tax accounts -- particularly as relates to intercompany transactions. We hope this publication, along with the PwC 2010 Guide to Accounting for Income Taxes, offers insight and guidance that is impactful.